Question

The Assembly Department produced 5,000 units of product during March. Each unit required 2.20 standard direct labor hours. There were 11,500 actual hours used in the Assembly Department during March at an actual rate of $17.60 per hour. The standard direct labor rate is $18.00 per hour. Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31.

Answer 1

To journalize the direct labor cost on March 31, multiply the actual hours worked (11,500) by the actual rate per hour ($17.60) to get the total actual direct labor cost ($202,400), then debit Direct Labor Expense and credit Wages Payable for that amount.

Step-by-step explanation:

The student is asking how to journalize the direct labor costs in the Assembly Department on March 31, given a set of actual and standard rates and hours, as well as the time when the direct labor for the month is paid. We will calculate the direct labor cost using the actual hours worked and the actual rate, and then we will make a journal entry to reflect these costs in the Assembly Department's accounting records.

First, let's calculate the total actual direct labor cost:

• Actual Hours Worked: 11,500 hours
• Actual Rate per Hour: $17.60
• Total Actual Direct Labor Cost: 11,500 hours × $17.60/hour = $202,400

Next, we record this as a journal entry on March 31st:

1. Debit Direct Labor Expense for $202,400
2. Credit Wages Payable for $202,400

This will reflect the labor costs incurred by the Assembly Department for the month of March.

Answer 2

The journal entry is as follows:

Step-by-step explanation:

Work in Progress A/c............................................Dr $198,000

Labor efficiency variance(unfavourable)...........Dr $9,000

Labor rate variance A/c........................Cr $4,600

Wages Payable A/c.................................Cr $202,400

Working Note:

Standard hour = Standard direct labor hours × (Standard hour - Actual hour)

= $2.2 × 5,000

= $11,000

Labor efficiency variance = $18 × (11,000 - 11,500)

= $18 × 500

= $9,000

Standard cost = Standard rate × Standard hour

= $18 × 11,000

= $198,000

Actual Cost = Actual rate × Actual hour

= $17.6 × 11,500

= $202,400